MGT035(STRAMA) Midterm PDF

TOPIC 1: Introduction to Strategy ILO 1: Explain the fundamentals of business strategy. ILO 2: Elaborate on the difficult choices related to strategy. ILO3: Explain the key ideas related to the planning process. What is Strategy? 1. Strategy is the creation of a unique and valuable positi...

TOPIC 1: Introduction to Strategy ILO 1: Explain the fundamentals of business strategy. ILO 2: Elaborate on the difficult choices related to strategy. ILO3: Explain the key ideas related to the planning process. What is Strategy? 1. Strategy is the creation of a unique and valuable position. Michael Porter, a Harvard Business School professor respected for his work on strategy wrote “Strategy is the creation of a unique and valuable position, involving a different set of activities” (Porter, 1996, pg.1). 2. Blueprint for Competition. Porter (1980), in a more succinct manner, stated that competitive strategy was the blueprint for how a business would compete in the marketplace, including its goals and objectives, In other words, strategy is the schematic, the framework for how an organization will operate. 3. A Guide for the Whole Business. An organization’s strategy guides every aspect of how the firm conducts business. Marketing plans, sales processes, capital investments, expansion strategies, and the hiring of new employees. 4. Applicable for all Types of Business. Strategy is apllied whether you work for a non-profit, a family-owned business, a public corporation, or a multinational operating in several countries. Strategy is Challenging 1. Strategy is not the Organization’s Operations. Strategy can be complicated and confusing. Far too many people running all sorts of organizations confuse strategy with operations. According to Porter (1996), many leaders tend to confuse operational effectiveness with strategy. Operational effectiveness (i.e., becoming more efficient), quality control, outsourcing certain activities, lean management, Six Sigma, or any management tool utilized to become a better, more efficient operation is not a strategy. All these are activities that can be copied by competitors. 2. Strategy is about being different. Strategy is about choosing a different set of activities that deliver a unique mix of value (Porter, 1996). Think of a family member or friend who works for a company and ask yourself “why would a consumer spend their hard- earned money on your friend or family member’s product or service when they have a choice?” 3. Strategies are not Organization’s Objectives. Another reason strategy is so difficult for so many is that they confuse strategy with objectives. A sales department leader may state that their strategy next year is to grow sales by 10%. Or their marketing counterpart may remark that their strategy is to introduce two new products next fiscal year. These are not strategies; they are objectives. Objectives flow from the organization’s strategic direction. Difficult Choices on Strategy A.G. Lafley, (former CEO of Proctor & Gamble) 1. What is your winning aspiration? Rather than define the organization’s mission and vision statements as a fuzzy, abstract picture of the future, translate the abstract into a more clearly delineated winning aspiration. 2. Where will you play? Which market? Which segment? Which customers? No organization can be all things to all customers. This is one of the most challenging decisions an organization must face. Too many firms fail to make the tough choices about where they have a clear competitive advantage and end up squandering precious resources in markets that fail to deliver adequate results. 3. How will I win? When thinking about how you will win, go back to the question “why would a consumer spend their hard-earned money on my product when they have a choice?” What makes your product or service unique? Why would a customer prefer your product over another? The answer is your competitive advantage. According to Porter (1996), competitive advantage is what makes a firm’s product or service preferable to a customer’s other options. 4. What capabilities must be in place? Successful organizations have what are referred to as core competencies. Core competencies are the strengths and capabilities that enable an organization to tie its where-to-play and how-to-win decisions together and differentiate its products or services from its competitors. Core capabilities and competencies will vary from company to company depending on the industry in which they compete and the products or services they offer. Innovation, for example, is one of Apple’s core competencies. Product choice, price, and service are hallmarks of Amazon’s core competencies. Google’s online search engine has enabled the company to distance itself from its competitors with this dominant core competency. 5. What management systems are required? To support an organization’s strategic direction, the entire operation must be aligned with the strategy. Production must be able to meet projected sales. Marketing plans must coordinate with product launches and new sales campaigns. Customer service operations must align with sales and financial goals. The right measurements to evaluate the results and take corrective action, if necessary, must be in place. In other words, strategic management is a system-wide process that involves, and ties, the entire operation together (Lafley, Martin, & Riel, 2013). The Strategic Planning Process 1. Plotting a Course toward a Brighter Future. Long-term sustainable success is not necessarily where you are today; it is where you want to be in the future. The strategic planning process is the tool organizations use to plot their course toward a brighter future. 2. No Perfect System. Downs (2017) noted that today organizations could choose from a number of strategic planning processes. These choices vary from a basic strategic planning model, the issue-based model, the alignment model, the scenario model, and the organic planning model. All this means is that there is no perfect system. Vision, Mission, and Values 1. A Company’s Vision. These are the foundations of a strategic plan. A company’s vision statement envisions the future by creating a mental image of the desired future position of the organization, where it wants to be. 2. Company’s Mission. The firm’s mission statement is more about “how” the vision will be achieved. 3. Company Values. Values are the core principles that guide the company. Let’s use Google as an example. Example of Vision, Mission, and Values. Let’s use Google as an example. Google’s vision is “to provide access to the world’s information in one click.” Their mission statement is “to organize the world’s information and make it universally accessible and useful” (Thompson, 2019). According to Brooks (2018) Google has ten corporate values among which are 1) follow the user and all else will follow; 2) it’s best to do one thing really, really, well; 3) democracy on the web works; 4) you can be serious without a suit; and 5) great just isn’t good enough. Clearly defined values help guide a company and attract people who share those values and fit with the company’s culture. Reference:  https://fhsu.pressbooks.pub/management/chapter/intro duction-to-business-strategy/ TOPIC 2: Industry Analysis ILO 1: Define industry analysis. ILO 2: Explain the key components of industry analysis. ILO 3: Explain the objectives of industry analysis. ILO 4: Elaborate the importance of industry analysis. ILO 5: Discuss the preparation process of industry analysis What is Industry Analysis? Industry analysis is the process of examining and evaluating the dynamics, trends, and competitive forces within a specific industry or market sector. It involves a comprehensive assessment of the factors that impact the performance and prospects of businesses operating within that industry. Industry analysis serves as a vital tool for businesses and decision-makers to gain a deep understanding of the environment in which they operate. Key Components of Industry Analysis 1. Market Size and Growth: Determining the overall size of the market, including factors such as revenue, sales volume, and customer base. Analyzing historical and projected growth rates provides insights into market trends and opportunities. 2. Competitive Landscape: Identifying and analyzing competitors within the industry. This includes assessing their market share, strengths, weaknesses, and strategies. Understanding the competitive landscape helps businesses position themselves effectively. 4. Customer Behavior and Preferences: Examining consumer behavior, preferences, and purchasing patterns within the industry. This information aids in tailoring products or services to meet customer needs. 4. Regulatory and Legal Environment: Assessing the impact of government regulations, policies, and legal requirements on industry operations. Compliance and adaptation to these factors are crucial for business success. 5. Technological Trends: Exploring technological advancements and innovations that affect the industry. Staying up-to-date with technology trends can be essential for competitiveness and growth. 6. Economic Factors: Considering economic conditions, such as inflation rates, interest rates, and economic cycles, that influence the industry's performance. 7. Social and Cultural Trends: Examining societal and cultural shifts, including changing consumer values and lifestyle trends that can impact demand and preferences. 8. Environmental and Sustainability Factors: Evaluating environmental concerns and sustainability issues that affect the industry. Industries are increasingly required to address environmental responsibility. 9. Supplier and Distribution Networks: Analyzing the availability of suppliers, distribution channels, and supply chain complexities within the industry. 10. Risk Factors: Identifying potential risks and uncertainties that could affect industry stability and profitability. Objectives of Industry Analysis 1. Understanding Market Dynamics: The primary objective is to gain a comprehensive understanding of the industry's dynamics, including its size, growth prospects, and competitive landscape. This knowledge forms the basis for strategic planning. 2. Identifying Growth Opportunities: Industry analysis helps identify growth opportunities within the market. This includes recognizing emerging trends, niche markets, and underserved customer segments. 3. Assessing Competitor Strategies: By examining competitors' strengths, weaknesses, and strategies, businesses can formulate effective competitive strategies. This involves positioning the company to capitalize on its strengths and exploit competitors' weaknesses. 4. Risk Assessment and Mitigation: Identifying potential risks and vulnerabilities specific to the industry allows businesses to develop risk mitigation strategies and contingency plans. This proactive approach minimizes the impact of adverse events. 5. Strategic Decision-Making: Industry analysis provides the data and insights necessary for informed strategic decision-making. It guides decisions related to market entry, product development, pricing strategies, and resource allocation. 6. Resource Allocation: By understanding industry dynamics, businesses can allocate resources efficiently. This includes optimizing marketing budgets, supply chain investments, and talent recruitment efforts. 7. Innovation and Adaptation: Staying updated on technological trends and shifts in customer preferences enables businesses to innovate and adapt their offerings effectively. Importance of Industry Analysis in Business 1. Strategic Planning: It forms the foundation for strategic planning by providing a comprehensive view of the industry's landscape. Businesses can align their goals, objectives, and strategies with industry trends and opportunities. 2. Risk Management: Identifying and assessing industry-specific risks allows businesses to manage and mitigate potential threats proactively. This reduces the likelihood of unexpected disruptions. 3. Competitive Advantage: In-depth industry analysis helps businesses identify opportunities for gaining a competitive advantage. This could involve product differentiation, cost leadership, or niche market targeting. 4. Resource Optimization: Efficient allocation of resources, both financial and human, is possible when businesses have a clear understanding of industry dynamics. It prevents wastage and enhances resource utilization. 5. Informed Investment: Industry analysis assists investors in making informed decisions about allocating capital. It provides insights into the growth potential and risk profiles of specific industry sectors. 6. Adaptation to Change: As industries evolve, businesses must adapt to changing market conditions. Industry analysis facilitates timely adaptation to new technologies, market shifts, and consumer preferences. 7. Market Entry and Expansion: For businesses looking to enter new markets or expand existing operations, industry analysis guides decision-making by evaluating the feasibility and opportunities in target markets. 8. Regulatory Compliance: Understanding the regulatory environment is critical for compliance and risk avoidance. Industry analysis helps businesses stay compliant with relevant laws and regulations. How to Prepare for Industry Analysis? 1 Data Collection and Research 1.1 Primary Research: When embarking on an industry analysis, consider conducting primary research. This involves gathering data directly from industry sources, stakeholders, and potential customers. Methods may include surveys, interviews, focus groups, and observations. Primary research provides firsthand insights and can help validate secondary research findings. 1.2 Secondary Research: Secondary research involves analyzing existing literature, reports, and publications related to your industry. Sources may include academic journals, industry-specific magazines, government publications, and market research reports. Secondary research provides a foundation of knowledge and can help identify gaps in information that require further investigation. 1.3 Data Sources: Explore various data sources to collect valuable industry information. These sources may include industry-specific associations, government agencies, trade publications, and reputable market research firms. Make sure to cross- reference data from multiple sources to ensure accuracy and reliability. 2 Identifying Relevant Industry Metrics 2.1 Market Size: Determining the market's size, whether in terms of revenue, units sold, or customer base, is a fundamental metric. It offers a snapshot of the industry's scale and potential. 2.2 Market Growth Rate: Assessing historical and projected growth rates is crucial for identifying trends and opportunities. Understanding how the market has evolved over time can guide strategic decisions. 2.3 Market Share Analysis: Analyzing market share among industry players can help you identify dominant competitors and their respective positions. This metric also assists in gauging your own company's market presence. 2.4 Market Segmentation: Segmenting the market based on demographics, geography, behavior, or other criteria can provide deeper insights. Understanding the specific needs and preferences of various market segments can inform targeted strategies. 3 Gathering Competitive Intelligence 3.1 Competitor Identification: Begin by creating a comprehensive list of your primary and potential competitors. Consider businesses that offer similar products or services within your target market. It's essential to cast a wide net to capture all relevant competitors. 3.2 SWOT Analysis: Conduct a thorough SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis for each competitor. This analysis helps you identify their internal strengths and weaknesses, as well as external opportunities and threats they face. 3.3 Market Share Analysis: Determine the market share held by each competitor and how it has evolved over time. Analyzing changes in market share can reveal shifts in competitive dynamics. 3.4 Product and Pricing Analysis: Evaluate your competitors' product offerings and pricing strategies. Identify any unique features or innovations they offer and consider how your own products or services compare. 5. Marketing and Branding Strategies: Examine the marketing and branding strategies employed by competitors. This includes their messaging, advertising channels, and customer engagement tactics. Assess how your marketing efforts stack up. Reference:  https://www.appinio.com/en/blog/market- research/industry-analysis TOPIC 3: Business Strategy ILO1: Define business strategy. ILO2: Explain the fundamental concepts of business strategy. ILO3: Elaborate the key components of business strategy. What is Business Strategy? Business strategy refers to a comprehensive plan or a series of actions meticulously crafted to achieve specific business goals and objectives. It entails a systematic approach aimed at gaining a competitive edge, responding to market dynamics, and attaining sustainable success within a particular industry or market. This strategic framework encompasses several crucial elements, such as defining the organization’s vision, mission, and values, assessing internal strengths and weaknesses, and Identifying external opportunities and threats. An effective business strategy demands an in-depth understanding of the market, competition, and internal capabilities. It involves strategic decision-making regarding resource allocation, target market identification, and the development of a distinctive value proposition to differentiate the organization from its competitors. Importantly, business strategy is not a one- time endeavor but an ongoing process that adapts to changes in the business environment. Strategy and Tactics 1. Strategy. In business, a strategy is the overarching blueprint that outlines an organization’s long-term goals and the broad approaches to achieving them. It is the high-level plan conceived by top leadership to provide direction and set the trajectory for success. Strategic decisions involve critical choices about markets, products, and positioning, impacting the entire organization. A robust strategy serves as a guiding force, providing stability and a framework for decision- making, ensuring that every action aligns with the overall mission. 2. Tactics. While strategy sets the grand vision, tactics are the nitty-gritty maneuvres designed for the immediate implementation of the broader strategy. Tactics are the specific actions, steps, and procedures undertaken by mid-level and front-line managers to execute the strategic plan. Unlike the more enduring nature of strategy, tactics are flexible and adaptable, responding to the dynamic and ever- changing business landscape. They deal with the specifics, answering the question of “how” the strategic goals will be achieved in the short term, making them the hands-on tools for day-to-day operations. Why is Strategy Important in Business? Strategy is essential in business for its role as a guiding roadmap. It aligns everyone with shared objectives, prevents deviations from the mission, and enhances internal performance. A well-crafted strategy is crucial for identifying market opportunities and trends, staying competitive, fostering innovation, and creating a comprehensive organizational vision. In essence, strategy is vital for ensuring alignment, efficiency, and adaptability in the dynamic business landscape. Value Creation for Customers A successful business strategy centres on understanding value creation. It involves the difference between customer willingness to pay (WTP) and the price of goods or services. The strategy aims to widen these gaps for customers, the firm, suppliers, and employees. By increasing customer delight, firm margin, supplier surplus, and employee satisfaction, businesses create value for all stakeholders. Engaging stakeholders and developing employees are crucial components of a sustainable strategy. Enhancing Customer Satisfaction and Boosting Customer Delight A well-crafted business strategy, deeply rooted in customer-centric principles, becomes the driving force behind tailored products and services that meet specific customer needs. This strategic approach optimizes every customer touchpoint, ensuring consistent and delightful experiences. By fostering a dynamic and adaptable response to changing customer preferences, business strategy enables organizations to stay ahead in a competitive landscape. Moreover, the continuous improvement cycle embedded in strategic planning allows businesses to identify and address pain points, creating a brand experience that goes beyond meeting expectations—it consistently exceeds them, fostering enduring relationships with satisfied and delighted customers. Internal Business Performance Guide Internally, a strategic business framework acts as a guiding force for optimal performance. It aligns teams, resources, and processes, fostering a collaborative environment where every individual works cohesively toward common objectives. This alignment enhances operational efficiency and overall effectiveness. Identify Opportunities and Trends in the Future Strategic thinking also includes proactive opportunity identification, allowing businesses to capitalize on emerging trends and innovative possibilities for sustained growth. It involves not only addressing current challenges but also anticipating future trends and opportunities. By incorporating this foresight into the business strategy, organizations position themselves as industry leaders, always staying one step ahead in a dynamic business landscape. This proactive approach extends to not just mitigating risks but also actively identifying and capitalizing on emerging opportunities. Create a Competitive Advantage Business strategy acts as the cornerstone for businesses aiming to carve out unique positions in the market. Through strategic differentiation, organizations can identify and leverage their strengths while addressing weaknesses, positioning themselves uniquely against competitors. Integrating innovation and foresight into the strategic business framework, empowers businesses to stay at the forefront, consistently delivering value that sets them apart, thereby establishing a sustainable and resilient competitive advantage. Create a Whole organisational vision A successful business strategy extends its impact beyond individual initiatives; it encompasses the entire organization. It nurtures a shared vision that aligns everyone toward a common purpose. This cohesive vision not only enhances internal cohesion but also provides a roadmap for sustained growth and success. Key Components of Business Strategy 1. Vision and Business Objectives. In business strategy, the component that lays the very foundation is a compelling vision and precisely defined business objectives. They not only provide direction but also serve as the bedrock for effective decision-making and resource allocation, ensuring that every aspect of the business aligns seamlessly with the overarching strategy. 2. The SWOT Analysis. It emerges as a pivotal component of business strategy. It goes beyond a mere examination of internal strengths and weaknesses or external opportunities and threats; it forms the bedrock for strategic planning. 3. Core Values and Resource Allocation. Aligning business strategy with core values ensures ethical decision-making. Strategic resource allocation ensures that resources are deployed efficiently to achieve business objectives. 4. Tactics and Operational Delivery. Effective tactics translate business strategy into action. A well-defined operational plan ensures that day-to-day activities contribute to overarching strategic goals. 5. Measurement and Analysis. Continuous measurement and analysis of key performance indicators (KPIs) help organizations track progress and make data- driven adjustments to their strategy. In business strategy, the relentless pursuit of success demands a vigilant eye on performance metrics and key performance indicators (KPIs). Measuring progress against predefined KPIs serves as a compass, providing real-time insights into the effectiveness of strategic initiatives. This data-driven approach enables organizations to gauge the impact of their actions, identify areas of success, and pinpoint areas that may require strategic recalibration. 6. Supply Chain Management. Supply Chain Management involves the end-to-end oversight of the processes and activities that transform raw materials into final products or services and deliver them to customers. In the realm of business strategy, an efficiently managed supply chain contributes to the seamless execution of strategic initiatives. 7. Integrating Technologies. Strategic integration of cutting-edge technologies, such as AI, IoT, and blockchain, is vital for keeping organizations at the forefront of innovation. This involves leveraging technology to enhance various aspects of business processes. By incorporating emerging technologies into the fabric of the business strategy, organizations can respond effectively to changing market dynamics, customer expectations, and industry trends. 8. Business Process Management. Efficient business processes are integral to successful strategy execution, BPM guides organizations in optimizing their processes for maximum efficiency, ensuring seamless alignment with strategic objectives. As organizations navigate the complex landscape of business strategy, BPM serves as a foundational element, ensuring that operational activities are not only efficient but also in harmony with the broader vision and objectives set forth in the strategic plan. 9. Business Intelligence and Analytics. Informed decision-making relies on accurate data. Incorporating business intelligence and analytics into the business strategy ensures that decisions are data-driven and aligned with organizational goals, fostering a culture of continuous improvement. 10. Competitive Analysis. Understanding the competitive landscape is vital for informed decision-making, it assists organizations in conducting comprehensive competitive analyses and provides valuable insights to inform strategic choices and maintain a competitive edge. Reference:  https://digitalleadership.com/blog/business-strategy/ TOPIC 4: Resources and Capabilities ILO1: Explain the fundamental concepts of strategic resources. ILO2: Explain the types and characteristics of strategic resources. ILO3: Discuss the fundamental concepts of organizational capabilities. What are strategic resources? Strategic resources are assets within a company that help it excel in its market. These can be physical assets, like products or services they provide, or intangible, like workforce quality. Strategic resources give companies a competitive advantage against others, hoping to achieve certain goals. What are the characteristics of strategic resources? 1. Valuable. A strategic resource has a value that people or companies desire. At a company, this might include people or assets that help increase productivity. This value improves the overall effectiveness or efficiency of a company and can increase the company's value itself. Companies might also have a specific product that is a top seller in the market, bringing increased value as it outperforms its competition. 2. Rare. A resource's rarity means that few others can acquire it. This often naturally increases its value along with the companies as only certain companies or individuals may have it. Rather than physical assets, this can also mean resources like company culture. For example, if a company offers benefits that are uncommon within their particular industry, this can be a rare resource. 3. Difficult to imitate. Resources that are difficult to imitate often help raise the standards within a market. This often means that someone at a company has a piece of specific knowledge or rights over an asset that can make it difficult for other companies to copy or produce. These types of resources often include intellectual property or branding, as companies often own the rights to IP and brand elements like logos and design. 4. Irreplaceable. Similar to the other characteristics, being irreplaceable means that other companies might not be able to achieve the same strategic goals as a company. Even when substituting for similar strategies, any changes to or imitations of the specific resource can lead to a decline in quality. Companies with irreplaceable resources can ensure they keep these in place to maximize effectiveness and business performance. What are the types of strategic resources? 1. Financial resources. More than just cash to spend on new products, advertisements or wages, substantial financial resources can be a strong strategic resource. This might mean a company's ability to maintain funding or credit through several sources while operating efficiently. Financial resources as strategic resources mean having better availability to some of these resources than their competition. You might find a competitive edge here if you can access new machinery, tools or products sooner than others. 2. Intellectual property. Intellectual property includes the resources that people within a company create. These can include inventions or artistic creations like designs or literature. Although all intellectual property isn't necessarily strategic resources, it becomes one when the creators have superior ideas that are rare in a particular field. Often companies will pursue patents or trademarks for their IP to make it difficult to replicate in a market. Strategic intellectual property often helps organizations create products more efficiently than the competition does. 3. High-performing staff. As strategic resources include company culture and how employees perform, high-performing staff can be a strong resource. Companies can create this through training opportunities, skill assessments, or unique benefits that encourage employees to work more efficiently. One way to develop high performance as a strategic resource is to invest in hiring individuals who already excel at their jobs, requiring less training or onboarding time. How do strategic resources differ from standard resources? Standard resources are often items like cash, property, and an organization's reputation. While these each provide unique value, they become strategic resources when used to create another, often more valuable, resource. Strategic resources often combine resources that might support one specific strategy or initiative to improve business effectiveness. What are the common types of resources? 1. Tangible resources: Tangible resources are those you can touch, like vehicles, equipment or cash. 2. Intangible resources: Intangible resources are those you cannot touch. These can include components like company culture or employee knowledge. What are organizational capabilities? Organizational capabilities are the processes created by an organization that differentiates it from its competitors and gives the organization a competitive edge. They're generally unique to the company, so the structure another organization follows cannot replicate them. Organizations typically form these processes by combining their skills, abilities, and human resources to focus on the company's strengths and clarify its competitive advantage. Importance of Organizational Capabilities 1. Adapting to change. Organizations that think ahead and demonstrate this in their actions and plans for the future can typically implement changes as they become necessary. They can foresee required changes in various aspects of business, such as customer relations, employee needs, or new market trends. Organizations that establish their capabilities efficiently often find managing change and adapting business practices relatively problem-free. 2. Building customer relationships. When organizations have the ability to build professional customer relationships, they have strong capabilities. They know how to capitalize on these strengths to command a greater market share. They can focus on providing exceptional customer service and satisfying their requirements. 3. Driving innovation. Organizations focus on upskilling their employees to ensure they are current with the latest market trends. An organization can drive innovation by investing in its workforce. A company that spends time and energy on developing employees' skills as its most significant resource understands that talent is irreplaceable in the workplace. These organizations encourage employees to experiment to devise new processes, improve efficiency, and develop original ideas. 4. Gaining a competitive advantage. An organization can gain a competitive advantage in the market when it focuses on attracting the best talent, building on its strengths, and using its available resources efficiently. Capitalizing on its talented workforce helps it stay ahead of the competition. Using its organization capabilities, the company can devise unique strategies that set it apart from its competitors. 5. Retaining talent. In many organizations, some skills are irreplaceable, and the company prioritizes them. An organization that attracts and retains good employees who are loyal and dedicated to their jobs can plan for growth and success. If the organization establishes adequate capabilities, It can equip its employees with the necessary tools and information to perform their assigned tasks to the best of their ability. Employees gain the motivation to work hard and align their goals with the company's mission and vision. The workforce develops a culture of continuous learning, which drives personal and professional growth. Examples of Organization Capabilities 1. Accountability. Organizations can place importance on every individual's responsibilities and make performance appraisals and accountability part of the company culture. This leads employees to take responsibility for their actions and ensure exceptional performance while working on achieving the company's objectives. 2. Collaboration. Including collaboration as a part of a company’s capabilities increases efficiency, decreases costs, leads to sharing ideas, and enhances creativity within the workplace. Allowing employees to brainstorm ideas and share talent across departments enables them to contribute to the overall success of a project by ensuring that different teams focus on the same organizational goal. 3. Competence. An organization that focuses on hiring and retaining competent employees can often predict successful results. The company can dedicate its competent employees to improving work systems, analyzing business needs, making the best use of available resources, and helping the organization achieve its mission. 4. Leadership. Organizations that place importance on leadership-oriented growth can improve the organizational environment by providing new opportunities for learning at each stage of a change. For example, when managers follow a common leadership style across a company's departments, employees can learn leadership qualities by imitating their manager's style and taking charge of a small team. 5. Strategic unity. When an organization includes its employees in formulating a strategic plan, it can usually create strategic unity in an intellectual, procedural, and behavioral sense. Employees recognize how their actions and tasks contribute to the strategic plan's overall implementation and they understand the reasoning behind the company's strategies and management decisions. References:  https://www.indeed.com/career-advice/career- development/what-are-strategic-resources  https://uk.indeed.com/career-advice/career- development/organisational-capabilities TOPIC 5: Change and Development ILO1: Explain the fundamental concepts of strategic change. ILO2: Elaborate the forms and types of strategic management. ILO3: Explain the fundamental concepts of strategic development. What is Strategic Change? Strategic change refers to significant adjustments or modifications within an organization intended to enhance the company’s performance, market position, or operational effectiveness. These changes often align with the company’s long-term objectives or strategic vision. Forms of Strategic Change 1. Changes in Organizational Structure. This could involve restructuring departments, merging roles, or changing reporting lines to improve efficiency, communication, or decision-making processes. 2. Changes in Business Model. Companies may need to adapt their core business strategies due to external factors such as market shifts, changes in customer behavior, or technological advancements. 3. Changes in Strategic Focus or Market. A company might target a new market segment or even entirely new markets to stay competitive or increase growth. 4. Technological Change. Companies may adopt new technologies to improve their products, services, or internal operations. 5. Cultural or Behavioral Change. Organizational culture can significantly impact a company’s performance. Leaders might implement strategic changes to foster a more innovative, cooperative, or efficient culture. 5. Changes in Leadership or Management Practices. New leadership or management approaches might be introduced to better align with the company’s vision and objectives. Types of Strategic Change 1. Transformational Change. This is a radical, fundamental shift in an organization’s operations, often involving a complete overhaul of the business model, strategy, or culture. Significant external changes in the market or industry might trigger it. For example, digital transformation is a common form of transformational change where a business fundamentally changes its activities to incorporate digital technologies. 2. Incremental Change. This refers to a series of small, gradual changes that improve an organization’s strategy, processes, or structures over time. Instead of one large- scale overhaul, incremental change opts for a step-by-step approach that can be easier to manage and cause less disruption. 3. Anticipatory Change. Anticipatory change is proactively initiated in response to predicted future events, trends, or challenges. For instance, a company might alter its product line to cater to anticipated shifts in customer preferences. 4. Reactive Change. Reactive change occurs in response to unexpected events or crises that have already happened. It’s typically more urgent and less planned than anticipatory change. For instance, many companies rapidly shifted to remote working arrangements due to the recent pandemic. 5. Planned Change. Planned change is a deliberate, structured process where changes are thought out and implemented systematically. It’s often led by management and can encompass various strategic shifts, from restructuring to new market entry. 6. Emergent Change. Emergent change is less structured and more organic, often arising spontaneously from employees’ actions and interactions rather than being directed from the top. It’s a flexible approach to change that can help organizations adapt to complex, unpredictable environments. Steps to Implement a Strategic Change 1. Assess the Current Situation. The first step is understanding the organization’s current strategy, performance, and environment. This might involve analyzing financial performance, market conditions, competitive forces, organizational capabilities, and other relevant factors. 2. Identify the Need for Change. Based on the assessment, identify the areas where change is needed. This could be anything from improving operational efficiency to entering new markets. 3. Develop the Vision and Strategy for Change. Define a clear vision for what the organization should look like after the change and develop a strategy for achieving it. The strategy should outline the change’s key goals, actions, resources, and timeline. 4. Communicate the Change. Once the strategy is developed, communicate it to all stakeholders, including employees, shareholders, customers, and partners. The communication should convey the reasons for the change, its benefits, and how it will be implemented. 5. Plan and Implement the Change. Develop a detailed action plan for implementing the change, specifying who will do what, when, and how. This might involve restructuring departments, training staff, or adopting new technologies. 6. Manage Resistance and Encourage Adoption. Change can often be met with resistance. It’s important to identify potential sources of resistance and develop strategies to manage them. This could involve providing employee support and training, seeking feedback, and involving employees in the change process. 7. Monitor Progress and Make Adjustments. Once the change is underway, regularly monitor its progress and impact. This could involve tracking key performance indicators (KPIs), gathering feedback, or conducting reviews. Based on the monitoring, adjustments may be made to the change plan or strategy as necessary. 8. Consolidate the Change. Once the change is implemented and the desired outcomes are beginning to be seen, it’s crucial to consolidate the difference and make it part of the regular way of doing things. This might involve reinforcing the change through communication, aligning it with organizational culture and systems, and rewarding desired behaviors. What is strategic development? Strategic development is a process that organizations use to analyze their internal and external environments to determine the resources and actions they require to stay competitive and successful. Setting strategies may help companies reach their objectives by adjusting their direction in response to changing conditions. An organization may develop a strategy for some of the following reasons: To review operations by looking at what the organization may focus on next To implement the current strategic direction To refine the current strategy To build a strategy for the first time Considerations for Strategy Development 1. Understand the market and competition. Do a thorough analysis of the market where the company you work at operates. This may include exploring target audience characteristics, learning why the company's products or services are useful, and identifying potential obstacles to higher sales or service levels. Analyze the competition by gathering information about their pricing, products, promotional strategies, and placement of their goods and services. Understanding the market and the position of your competitors allows you to place the organization in context within its industry or sector. 2. Evaluate threats and challenges. Assessing threats and challenges an organization may face allows you and your colleagues, leaders, and other stakeholders to contribute ideas from different perspectives. This can allow you to gather information from as many internal and external sources as possible. Take time to talk individually with stakeholders, facilitate group meetings, or ask them to respond to questions virtually to find out about the risks to the organization's success. 3. Project into the next three to five years. The timeline for strategy development typically projects into the next three to five years as longer-term planning is subject to changing challenges and opportunities from many unknown external forces. An important element of developing a strategy is deciding the steps that you may take to close the gap between where the organization is now and where it may be in three to five years. If the gap seems too large to close in the strategic planning period, a re-evaluation of goals, objectives, and approach might be necessary. 4. Document your strategy. Outline your strategy for each month for the first year, then quarterly, and annually for the last three years of a five-year plan. Writing down your strategy allows you to assess how all elements work together and determine if any data or other information may be missing. Meet weekly with your management team and employees during the strategy development phase to check what you're documenting against their feedback and input. 5. Adopt a flexible attitude. Markets and demands change, new competition enters the market, and economies shift with global demand and supply. Create your strategy with a flexible mindset to consider changes you may not expect or world events that can reshape an industry. When your strategy is complete, constantly consider how any external and internal forces may change your action plan or your measurable objectives. 6. Review information technology (IT). An organization's strategy often includes IT considerations to identify tools and actions that may make it more efficient and productive. Planning involves noting elements to improve, opportunities to integrate systems, and the need for new technologies. IT technology and processes are critical to most organizations' success and including them in your strategic consideration ensures that technology investments focus on achieving the company's goals and objectives. References:  https://thestrategystory.com/blog/strategic-change- meaning-types-examples/#google_vignette  https://ca.indeed.com/career-advice/career- development/strategic-development TOPIC 6: Strategy Implementation ILO1: Explain the fundamental concepts of strategy implementation. ILO2: Explain the various safeguards in insuring strategy implementation success. ILO3: Discuss the steps in strategy implementation process. What Is Strategy Implementation? Strategy implementation is the act of executing a plan to reach the desired goal or set of goals. The brainstorming process helps formulate these ideas, while the implementation process puts those strategies or plans into action. Strategy implementation depends heavily on feedback and status reports to ensure the strategy is working and to rework any areas that may need improvement. Importance of strategy implementation Strategy implementation is important because it involves taking action instead of simply brainstorming ideas. It helps show the team that the strategies discussed are viable. It's also a great tool for team development because everyone can participate. Strategy implementation depends on thorough communication and the right tools to facilitate the strategy. How to experience a successful strategy implementation? 1. Define clear goals and strategies. The most important component of successful strategy implementation is defining clear goals and the process to help the team reach those goals. Consider displaying the goals and desired strategy on a whiteboard or PowerPoint presentation for the team. Including a visual aid can help the team get a clearer picture of the strategy, including what the goals are and what it looks like when they've reached them. It's also a good idea to ensure the goals and strategy align with the company’s values and vision. Review your goals to see if any components don't align and adjust them accordingly. That way, everyone is confident in what they're doing. 2. Determine roles and leadership. The next step in successful implementation is to define the roles of the team. Consider hosting a separate meeting where you explain the roles of everyone on the team. This can help improve accountability among team members and the overall transparency of the project. You can determine your leadership structure at this phase as well. If your team only needs one leadership role, be sure to explain why you chose that person for the role. Determining roles also means discussing responsibilities. You can determine who’s responsible for each part of the project and any individual deadlines you might have. If you're the manager, keeping yourself accessible can help the team if they encounter challenges in the project. 3. Execute your plan. Once you've communicated the strategy and assigned roles, you can begin the execution of the plan. The team typically makes initial progress within the first few days or weeks, and that can be a good time to give a progress report. Progress reports help everyone better understand the team's weaknesses and strengths, how far they've come, and what they need to do to reach the end goals. It can be helpful to give progress reports or team updates at certain milestones throughout the project. These can include: a. At the start of the project b. The first major challenge of the project c. The midpoint of the project d. The final stage of the project e. Anytime a major challenge becomes a failure to deliver f. After the team has completed the project and has reached or missed the goals 4. Monitor and encourage. Frequent updates are important to the morale of the team. Good feedback can help encourage and motivate team members to reach for initial goals and maintain productivity throughout the project's life span. You can monitor individual performance to ensure each team member is doing their part and identify problem areas quickly. Tips for effective strategy implementation 1. Establish frequent communication. You can facilitate communication through company tools, such as project management software or messaging software. Managers can make themselves more available by setting up office hours or leaving their email addresses open for the entirety of the workday. 2. Promote honesty. Being honest with the team and with yourself can help everyone grow and reach the goal, which can create a more cohesive team and facilitate trust among team members. If there's a challenge that's holding back the team, looking at it through an honest view can give a more complete perspective of the problem. 3. Ensure clarity. Goals and strategies often work best when you define them clearly. A good strategy typically includes clear goals and specific methods of reaching those goals. 4. Offer team support. When challenges arise, a supportive team uses its collective knowledge to address and resolve the problem quickly so the project can move forward. You can encourage team support by providing communication tools and modeling what a support figure looks like. 5. Provide the right tools for the job. Not having the proper tools to complete a project can be challenging. A great way to help the team move forward and reach its goal is to provide the right tools for the job.. Strategy implementation challenges 1. No safeguards. Not establishing safeguards or addressing potential challenges that may arise can lead to problems. While it's impossible to predict every setback, planning for potential issues can save time and frustration in the future. 2. Inadequate support. It's important to reinforce a company culture of support and accountability so that no one feels like they're alone on the project. A team that supports one another often has an advantage over a team that works independently. 3. Lack of communication. Any misconceptions or miscommunications can cause roadblocks and delay strategy implementation. It's important to be as thorough as possible from the beginning to avoid any complications. Strategy Implementation Process 1. Developing an Implementation Plan. The first step in the process is to develop a detailed plan for implementing the strategy. This plan should clearly outline the tasks that need to be accomplished, who is responsible for each task, when each task needs to be completed, and what resources are required. 2. Resource Allocation. Resources need to be efficiently allocated to support the strategy. This could involve financial resources, human resources, materials, or time. It’s also important to ensure that the organization can implement the strategy. 3. Organizational Structure Adjustments. Sometimes, the existing organizational structure may need to be modified or redesigned to support the strategic goals. This could involve changes in roles, responsibilities, reporting lines, etc. 4. Strategy Communication. It’s important to communicate the strategy across the organization. All employees should understand the strategy, their role in it, and how their work contributes to strategic objectives. 5. Employee Training and Development. Employees may need new skills or knowledge to carry out their roles under the new strategy. This might require training, mentoring, or hiring new staff.  6. Performance Management. Set clear performance standards and Key Performance Indicators (KPIs) to monitor progress toward strategic objectives. Regularly review performance and provide feedback. 7. Leadership and Management Support. Leaders and managers should commit to the strategy, set a good example, and motivate their teams. 8. Review and Adjust. Strategy implementation is not a one-time activity. Regularly review progress and make necessary adjustments. This might involve changing aspects of the strategy, altering the implementation plan, or reallocating resources. Reference:  https://www.indeed.com/career-advice/career- development/strategy-implementation  https://thestrategystory.com/blog/strategy- implementation-process-models- example/#google_vignette